NHS privatisation

The Coalition government, towards the end of its term of office, denied that it was privatising the NHS, pointing out that health care is still free at the point of use. Others,  (such as the King’s Fund) have suggested that claims about privatisation are exaggerated.

These denials are misleading. According to the World Health Organisation, privatisation is where non-government bodies become increasingly involved in the financing or provision of health care services. On this basis, the NHS is being privatised in a number of ways, some of which have been made possible by the Health and Social Care (HSC) Act (2012), while some predate this.

Ways in which the NHS is being privatised:

  • The increasing number of private companies providing NHS services: Their involvement can range from providing GP or out of hours services, to diagnostic services such as scans or blood tests; to ambulance services, or elective (routine) surgery. In addition, private, multinational consultancy firms are being paid considerable amounts of taxpayers’ money for advising NHS providers, such as hospital Trusts, on managing their services. Rather differently, the global management consultancy company McKinsey was employed to advise on the current government’s ‘reforms’ of the NHS.
  • The creation of NHS Foundation Trusts (FTs): Foundation Trusts are NHS organisations that have been granted a significant amount of managerial and financial freedom – they are no longer accountable to the Secretary of State for Health but to a board of governors. They have the freedom to set their own terms and conditions of service (including salaries), the freedom to decide local priorities, and the freedom to borrow and to set up joint ventures with the private sector. Legally, they are no longer regarded as public services but profit-seeking businesses (although profits are reinvested in the FT, and not shareholders). They can earn almost up to 50% of their income from non-NHS services.
  • The use of the Private Finance Initiative (PFI and PF2): The Private Finance Initiative (PFI), and its sequel PF2, have become the main ways of funding major NHS projects like new hospital buildings. This scheme means that public funds allocated to the NHS are being syphoned off by private companies, with NHS Trusts paying bankers and other PFI investors at least twice as much for each new hospital as they would if Trusts could borrow the necessary finances from the government. In addition, PFI deals usually involve NHS Trusts handing over their land to private consortia for them to build on: currently over 100 NHS facilities are owned by banks and other private investors. This land only returns to the ownership of the NHS at the end of the contract, anything up to 100 years later. If an NHS Trust defaults on its PFI deal, the land, and any buildings on it, are retained by the PFI consortium.
  • The creation of a new market in ‘commissioning services’: Although GPs have been made responsible for the commissioning of NHS services, much this work (such as planning and procuring services, managing contracts with health care providers, and designing the NHS of the future) has been carried out by Commissioning Support Units (CSUs). Now the commissioning support structure itself is being put out to tender. Commissioning services are to be bought from a list of ‘preferred providers’ dominated by private, multinational companies.  These companies face conflicts of interest as they may be looking to provide health services while they are in charge of the local health budgets that pay for these.
  • The setting up of a company (PropCo), also known as NHS Property Services Ltd, which now owns and manages much of the land and buildings previously owned by Primary Care Trusts before they were abolished. PropCo is currently publicly owned but could at any time sell all but one of its shares to private investors.
  • The commercial use of the NHS logo: Not many patients are aware of the growth of private companies that are providing NHS services because these companies often use the famous blue NHS logo on their vehicles, signage, staff ID etc., while providing little indication that the service is privately delivered. According to the Department of Health, using the NHS logo will reassure patients that such services are provided in line with NHS values. It is unclear how this can be the case, given that privately provided services will be shaped by the first priority of commercial companies – to make a profit for their shareholders.
  • The introduction of personal health budgets, which some see as a step towards opening up the NHS to private insurance companies;
  • The inclusion of the NHS in the Transatlantic Trade and Investment Partnership (TTIP) which, if agreed, would give transnational corporations irreversible rights to operate without limit in the NHS.

These measures are gradually transferring NHS assets – whether these are tangible (e.g. land or tax payers’ money) or less tangible (such as the value of the NHS logo) – to the private sector.

(Further details of these issues can be found by following the highlighted links to other pages of the website. See also Marketisation and A long term plan)

Useful reading:

www.opendemocracy.net/ournhs/clive-peedell/cameron-lied-to-the-country-says-clive peedell


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